If a Trustee has full discretion over distributions, the beneficiary has no property law right to the Trust assets. This is also known as a Wholly Discretionary Trust or Discretionary Trust and can be used for creditor protection of the beneficiary. Generally, the beneficiary is prohibited from being the trustee of this type of Trust. Examples of standards include health, education, support, and maintenance, reasonable comfort, at a level of comfort to which the beneficiary has become accustomed, etc.
It is possible for a beneficiary to be the Trustee of an irrevocable trust with a HEMS standard and for the assets to not be included in a taxable estate because the standard is ascertainable.
A Non-Discretionary Trust includes a required distribution, such as a QTIP Trust or a trust that requires the distribution of all income annually.
Discretionary v. Non-Discretionary Trust:
When it comes to trusts, there are two main types: discretionary and non-discretionary. A discretionary trust, also known as a wholly discretionary trust in Ohio, gives the trustee full discretion over distributions. This means that the beneficiary has no property law right to the trust assets. This type of trust can be used for creditor protection of the beneficiary. Generally, the beneficiary is prohibited from being the trustee of this type of trust. Examples of standards include health, education, support, and maintenance, reasonable comfort, at a level of comfort to which the beneficiary has become accustomed, etc.
On the other hand, a non-discretionary trust includes a required distribution, such as a Qualified Terminable Interest Property (QTIP) Trust or a trust that requires the distribution of all income annually.
In some cases, a beneficiary can be the trustee of an irrevocable trust with a health, education, maintenance, and support (HEMS) standard and for the assets to not be included in a taxable estate because the standard is ascertainable.
Estate Planning Attorneys Cincinnati
If you’re in Cincinnati and need assistance with estate planning, it’s important to find an attorney who has a focus in this area of law. Estate planning attorneys in Cincinnati can help you create a plan that ensures your assets are distributed according to your wishes after you pass away. They can also help you minimize taxes and protect your assets from creditors.
When searching for estate planning attorneys in Cincinnati, it’s important to consider their experience, credentials, and client reviews. Look for an attorney who has a strong track record of success and who is willing to take the time to understand your unique needs and goals.
Trust Attorney
A trust attorney’s focus is on creating and managing trusts. They can help you decide which type of trust is best for your situation, create the trust document, and ensure that it is properly funded. They can also advise you on managing the trust assets and fulfilling your fiduciary duties as a trustee.
When looking for a trust attorney, it’s important to find someone who has experience in this area of law and is familiar with your state’s specific laws. They should be able to explain complex legal concepts in simple terms and guide you throughout the process.
Whether you need assistance with estate planning or creating a trust, finding a knowledgeable and experienced attorney who can help you achieve your goals is important.
Contact us today to schedule a consultation and learn more about how we can help you with your estate planning needs.